Those slippery federal subsidies

April 2, 2014

Look the word "hypocrisy" up in a dictionary. With it, you'll see a picture of Uncle Sam. That's because when it comes to saying one thing and doing another, federal government officials are kings.

An excellent example is the National Flood Insurance Program. In 2012, President Barack Obama's administration cited a $24 billion NFIP deficit in convincing members of Congress to alter the program. Flood insurance rates needed to be changed to ensure property owners' premiums reflected actual risk, lawmakers were told.

But the idea behind the premium changes is that taxpayers shouldn't be subsidizing owners of property subject to flooding. Hey, we can all agree on that, can't we? That no class of people should be subsidized by taxpayers?

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Mike Myer

Well, no, we can't. Tens of billions of dollars in taxpayers' money is spent on subsidies every year.

As we pointed out in an editorial this week, the government is averse to subsidizing people who have too much water, in the form of floods. But it has been more than happy for decades to subsidize those who don't have enough.

Most of the big dams in western states were constructed primarily or even solely to provide stable water supplies to people such as those in California. The water Los Angeles residents drink may well have been piped to them from hundreds of miles away.

Each year the Bureau of Reclamation, which operates the dams, spends about $3 billion - while taking in only about $1 billion in payments for the water it sells. We taxpayers cover the $2 billion gap.

At that rate of subsidies, the flood insurance program, established in 1968, never would have had a deficit.

Few "alternative energy" ventures could get off the ground, much less endure, without massive government subsidies.

One study found that since 1973, Washington has provided more than $154 billion in subsidies for solar power farms, wind energy, etc. As you know, federal support has increased exponentially since Obama took office.

Direct taxpayer assistance at least is out in the open. Even worse are indirect subsidies for "alternative energy."

That happens when states and the federal government require utilities to produce certain percentages of the electricity they sell from "renewable" sources such as solar and wind. Both West Virginia and Ohio have such mandates.

Taking the indirect subsidies a step further, there are government mandates that federal agencies purchase certain percentages of "alternative energy" electricity. Obama has vowed to increase the percentages.

Every kilowatt hour of electricity you are forced by such mandates to buy costs you more than if you could simply buy the least expensive power utilities could produce.

Subsidies reach into every aspect of our lives. Local governments often are required, when state or federal money is used, to pay "prevailing wage" to construction workers. It has been pointed out that in West Virginia, prevailing wage scales are set by the government using information provided by labor unions. Often, the dollar amount is higher than the actual wage usually paid in an area.

That costs taxpayers dearly.

And, as an aside, federal prevailing and minimum wage laws were not founded in genuine altruism. Part of the idea among some racist members of Congress was that such laws would keep African-Americans from displacing white workers by undercutting them on wages.

The subsidies list goes on and on and on. Your sugar costs more because the domestic sweetener industry is subsidized indirectly by Congress. Obamacare subsidizes some types of health care, such as contraception, favored by special interest groups - while making it more difficult to, for example, keep the doctor you have now.

So when the feds say flood insurance premiums are going up because it's unacceptable for taxpayers to subsidize anyone, they're lying.